After a wild ride over the course of 2021, the job market continues to show signs of improvement. As many people exited the labor force during the pandemic, sentiment surrounding finding a new job improved dramatically, as CivicScience tracking shows. Job prospect outlook appears to be leveling heading into 2022 – the majority of people think finding a new job is bound to get easier or stay the same, but not become more difficult.
On the other side of the coin are concerns over whether or not there are enough new and returning employees to fill the millions of open positions. 2020-2021 saw a record number of Baby Boomers ages 55 and up retire from the workforce – an estimated 3 million additional retirees – complicating expectations of the workforce returning to pre-pandemic levels.
It’s suggested that many of these additional retirees were not well-prepared for retirement but left the workforce early as the result of lay-offs, fear of getting COVID-19 in the workplace, and difficulties finding new employment as an older adult.
CivicScience took a look at the financial outlook for recent ‘pandemic retirees’. A survey of 1,543 U.S. adults who are either in the workforce or retired finds that 8% retired over the course of the pandemic.
Overall Savings and Investments
In contrast with people who retired before the COVID-19 pandemic, those who retired during the pandemic in 2020-2021 are less financially confident. Data show that the majority of people in this group have some sort of retirement fund or pension plan, yet a total of 35% say they don’t feel they have enough money in investments and savings, including retirement savings, while 20% feel strongly they do not have enough. That’s compared to a total of 32% of previous retirees.
At the same time, 19% of pandemic retirees are also likely to say they have “much more than enough” in investments and savings, which is more than 50% higher than pre-pandemic retirees, indicating how the pandemic has led to extreme disparities amongst the American public.
Wealth Gained During the Pandemic
Another area where this disparity can be found is in wealth gained over the course of the pandemic. As stimulus payments and other factors helped to improve personal financial outlook for many (at least for a time), the survey shows pandemic retirees were among those most likely to fall short. A total of 21% say they are financially worse off than before the pandemic, compared to 17% of previous retirees. One-third, on the other hand, are now financially better off, compared to 28% of pre-pandemic retirees.
Future Financial Outlook
In terms of expectations for a future in retirement, nearly one-quarter of pandemic retirees expect to have less money saved six months from now. Thirteen percent expect to have significantly less, which is significantly more pessimistic than previous retirees. That said, over half of pandemic retirees anticipate putting more money away this year, placing them at an advantage over former retirees.
Income Level and Education
Looking at income and education helps to provide a baseline to some of the survey results in the charts above. Nearly 40% of recent retirees say they earn (or previously earned as of January 2021) $50K or less annually. They are also less likely to have obtained a college degree compared to previous retirees.
However, close to 20% also earn $150K or more annually, again showing how differently the pandemic affected older adults in the workforce.
In addition, pandemic retirees are the most likely to rate themselves as having poor financial literacy. Nearly 20% say they are not at all financially literate – more than twice that of pre-pandemic retirees.
Ultimately, the survey results suggest that a significant portion of individuals who retired during the pandemic now face more financial odds overall than retirees who came before them. A concerning figure to emphasize is the 35% of recent retirees who do not feel financially prepared for retirement, prompting the question of whether or not they will attempt to return to the workforce. However, an even greater portion of pandemic-era retirees are more likely to be better off financially than their predecessors, suggesting these retirees are on average more financially secure as they head into retirement.